Reserve Study Presentation: About Percent Funded Joel L. Tax, RS PRA Reserve Specialist https://www.reservedataanalyst.com
2. Presentation Topics
3. What is Percent Funded?
4. Percent Funded: The Formula Example: Paint Project Costs: $100,000 Age of Paint: 1 years Paint Useful Life: 10 years Reserve Account Balance: $5,000 **This community has half of the amount they ideally should have at this point in time.
5. Being 100% Funded In 10 Years a Paint Project: $100,000.* *Interest and inflation omitted for simplicity 100% Funded = on track for project expense. ReserveAccountBalance
6. Being 50% Funded In 10 Years a Paint Project: $100,000.* *Interest and inflation omitted for simplicity They are @ 50% Funded = Shortfall ReserveAccountBalance
7. Percent Funded Projections *Percent Funded calculations will fluctuate up and down over time based on annual contributions and project expenses occurring.
8. Common Percent Funded Ranges *Typical goal of the Reserve Analyst is to create funding model that increase the percent funded into a “Good” funding range over time.
9. Risk of Low Percent Funded K S I R Higher Risk Of: •Cash Flow Issues – Loans, Special Assessments, Emergency Financing •Deferred Projects •Marketability & Aesthetic Appeal Issues *Under 30% Funded equates to a much higher risk
10. Considerations for Percent Funded
11. Do you have any questions? ??? Joel L. Tax, RS PRA Reserve Specialist